Why are Corporate PPAs important for the Retail and Consumer sector?
Corporate PPAs are becoming increasingly prominent for global businesses, driven largely by their environmental and economic advantages and are a valuable tool for Retail and Consumer businesses. These PPAs are particularly useful for businesses which are high consumers of energy – for example hotel chains, manufacturers and “big box” retailers, as they allow such businesses to purchase power on a long-term basis, directly from renewable energy generators without having to physically exist in the same location.
With consumers increasingly demanding that luxury, fashion, hotel and food & beverage brands be more sustainable as opposed to simply claiming to be, the use of Corporate PPAs to obtain energy efficiency is particularly beneficial for brand enhancement. PPAs demonstrate a commitment to clean energy and sustainable practice to both attract environmentally conscious consumers and to differentiate brands from competitors.
In the Retail and Consumer sector, heating, lighting and refrigeration are significant energy demands both at site-level and in the supply chain, and there is a broader range of grid reliance and emissions across these businesses compared to other sectors such as technology and communications, or construction. PPAs accordingly provide a route to cost savings, a decarbonised grid and energy independence for the more energy-intensive consumers so PPAs are being increasingly utilised such as in the examples below.
The H&M Group for example has signed a PPA for a vast new Swedish solar park in order to help the company achieve its climate targets. Walmart provides its suppliers with access to collaborative PPAs in order to increase the share of renewable energy in its global supply chain through ‘Project Gigaton’, 4,500 of whom have joined this programme since 2017 and account for approximately 50% of Walmart’s revenue. In total, Walmart has signed PPAs for over 10 GW of renewable energy, making it the largest private purchaser of renewable energy in the USA.
The Fashion Pact is another example of a strong and shared commitment to clean energy within the sector, a non-profit organisation that brings together CEOs from across the fashion industry, including Burberry, Nike, Inc. and Ralph Lauren. Brands of all sizes are working collaboratively to bring about large-scale change and their ‘Collective Virtual PPA’ project aims to add 160,000 MWh of renewable electricity to the grid in Europe every year, enabling members to reach their individual sustainability targets.
Overall, PPAs are an important tool for businesses in the Retail and Consumer sector in order to reduce energy costs, increase sustainability and attract and retain a growing number of environmentally-conscious consumers. The longer-term nature of these PPAs also provides more cost predictability and by securing an energy supply for an extended period, brands can plan for future growth and expansion more easily.
If you would like to find out more, please visit our Corporate PPA Hub or get in contact with us.
